The Advisory Electric Rate (AER) is a pence per-mile reimbursement rate set by the government for drivers using company-owned vehicles.
The major issue with the AER as a flat rate is that it doesn’t reflect the real-world cost of running an EV.
Businesses will typically have employees charging at home, all with different energy suppliers and tariff rates, therefore a flat rate will never be able to cover the cost of each employee's charging costs.
Of course, businesses can pay above the AER, but in order to do so they must provide HMRC with evidence of each charge including location, duration and the kWh otherwise both the employee and employer will have BIK tax to pay on the difference.
With a fleet of just two vehicles, you can see how much admin time this would take for a business to get right, can you imagine how complex it would be with more vehicles?
Luckily though, Allstar have a solution, Allstar Homecharge.
Accurate payments are made directly to each driver's home energy supplier for the cost of charging their company EV at home*. Drivers’ tariffs and energy suppliers are monitored to ensure the accurate amount is always paid. The businesses then receive just one invoice which covers their entire fleet’s charges.
*In order to comply with HMRC Vehicle Fuel benefit businesses may require a process to identify and reclaim payments for private use.
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